From two weeks ago, XIV price have begun to deviate from its NAV. Now it's 3% higher than its NAV or SVXY who traces the same index. That happened to TVIX several years ago as well. At that time, TVIX's price was even more than 10% higher than its NAV. This is quite uncommon for a popular ETF with a big volume; you can't manipulate the price of such ETF. I don't know if anybody has any explanation of that. The only thing I can figure out is that XIV and TVIX are both issued by VelocityShares.
It's probably not an easy ETN to create. At this deviation from NAV you'd expect to start seeing the share outstanding increase until the deviation is eliminated. Also, there appears to be a general demand for short vol immediately after VIX rallying.
A minute ago, according to my IB Trader Workstation, XIV and XIV.IV were 100.35 and 75.05, meaning a 33.7% premium! I see XIV down 14% vs. SVXY down 20% today. These are big dislocations. What is going on?
Hey, ajensen, Can I buy xiv now, since it is in short restriction, if I buy xiv, can its price rise 10% if vxx decrease 10%?
I think you can buy XIV, but it is trading at such a large premium to fair value that buying SVXY instead makes more sense if you want to be synthetically short VIX futures.